Bundesbank to Repatriate 674 Tons of Gold to Germany by 2020

Certainly a watershed moment this is in a world of fiat currencies. Let’s face it, if you don’t hold the physical gold, you don’t own it. It’s interesting that the Germans are repatriating all 11% of their gold from Banque de France – a country that uses Euro. However, they are still leaving gold with non-Euro countries such as the US and England. Maybe they are preparing for an Euro currency exit?

“The following table shows the current and the envisaged future allocation of Germany’s gold reserves across the various storage locations:”

31 December 2012

31 December 2020

Frankfurt am Main

31 %

50 %

New York

45 %

37 %

London

13 %

13 %

Paris

11 %

0 %

Notable Excerpt:

“The Bundesbank will repatriate 674 metric tons of gold from vaults in Paris and New York by 2020 to restore public confidence in the safety of Germany’s reserves. ”

“The phased relocation of the gold, currently worth about 27 billion euros ($36 billion), will begin this year and result in half of Germany’s reserves being stored in Frankfurt by the end of the decade, the Bundesbank said in a statement today. It will bring home all 374 tons of its gold held at the Banque de France and a further 300 tons from the New York Federal Reserve, it said. Holdings at the Bank of England will remain unchanged.”

““With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centers abroad within a short space of time,” the Bundesbank said. It said the complete withdrawal of reserves from Paris reflects the fact that Germany no longer depends on France as a financial center to exchange gold because both nations use the euro.”

“Germany’s Audit Court sparked a debate about the country’s gold reserves last year when it called on the Bundesbank to take stock of its holdings abroad, saying their existence had never been verified. German gold reserves, the second-largest in the world after the U.S., amounted to 3,391 tons as of Dec. 31 and were valued at 137.5 billion euros.”

Maybe the Germans are emotional about the country’s gold reserves is because they still remember the Weimar Republic hyperinflation.

““In Germany, a lot of emotion is attached to the topic of gold reserves,” Bundesbank board member Carl-Ludwig Thiele said…”

“The Bundesbank is negotiating auditing rights with its partner central banks. Thiele said he visited all storage locations last year and the returning gold will be examined.”

“While German gold is stored for free in New York and Paris, the Bank of England charges between 500,000 euros and 550,000 euros a year. “